PEAK-BASE COST ALLOCATION MODELS

Abstract

During the past several years, most transit agencies have been faced with the problem of rising deficits and limited tax resources to meet operating subsidies. For this reason, renewed emphasis has been placed on examination of the system's financial performance on a route-by-route basis. While route revenues can be determined by surveys and field counts, operating costs are more difficult to ascertain by route. Typically, the cost anslysis has been conducted utilizing multivariable cost allocation models in which each expense account in a system is attributed to a particular resource (e.g., vehicle kilometers). This paper presents the cost analysis performed for the Metropolitan Transit Commission (Minneapolis-St. Paul) as part of the monitoring and evaluation program of the I-35W Urban Corridor Demonstration Project which tested the feasibility of express bus service on a metered freeway. The paper calls for the development of cost formulae that are sensitive to peak and base conditions rather than a single systemwide model. Also described in the paper is the development of labor productivity and service indices which can be used to compute both peak and base unit cost factors. The theoretical derivation of the relationship between the unit cost factors with systemwide costs and the indices, as well as the application of this theoretical concept, are presented. /Author/

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